Michael E. McLaughlin, CFE, CAMS’ Post

Some changes are coming to AML/CFT compliance. Federal agencies (OCC, Fed, FDIC, NCUA) are proposing an amendment that would reshape your AML/CFT programs and align them with FinCEN's proposals under the AML Act of 2020. When these new rules are implemented, every national bank, federal savings association, and community bank must establish more "effective, risk-based, and reasonably designed AML/CFT programs". (The comment period is still ongoing till Sept 1.) Here are the upcoming minimum requirements for AML/CFT programs based on the proposal: - "Dynamic" risk assessment process as AML/CFT program foundation - Risk-commensurate internal policies and controls - Qualified AML/CFT officer with regulatory oversight - Ongoing employee training - Independent, periodic testing - Additional requirements based on institution type (e.g., CDD and board oversight requirements) Through our veteran CAMS-certified consultants for BSA/AML programs, RADD is ready to assist you in understanding the proposal and planning toward its implementation. We’ve always believed that a risk-based approach, strong internal controls, dedicated staff, regular training, and independent reviews are the bedrock of meeting BSA recordkeeping requirements. That’s why our partners rely on us to: - Create or enhance their BSA/AML compliance frameworks - Perform thorough risk assessments to identify and mitigate risks - Ensure effective CDD and EDD processes are in place - To keep staff updated on BSA/AML compliance requirements and more. 👉 Ready to get ahead of these changes? Book a strategy call with us today: https://lnkd.in/eyZG_ff7 #RADDLLC #AML #CFT #Compliance #BankingRegulations #FinancialCrime #RiskManagement #BSA #FintechCompliance #RiskAssessment #FinancialServices

Yesterday, I read through some of FCA's consolidated examples of good and bad practices for managing high-money-laundering risk situations. Here are some that stood out: 🚧 High-risk customers and PEPs – AML policies and procedures. ✅ Good Practice Keeping AML policies and procedures up to date to ensure compliance with evolving legal and regulatory obligations. ❌ Bad Practice Failing to conduct quality assurance work to ensure AML policies and procedures are fit for purpose and working in practice. 🚧 High-risk customers and PEPs – Risk assessment ✅ Good Practice Using robust risk assessment systems and controls appropriate to the nature, scale and complexities of the bank. ❌ Poor Practice Allocating higher-risk countries with low-risk scores to avoid having to conduct EDD. 🚧 High-risk customers and PEPs – Customer take-on ✅ Good Practice Having clear risk-based policies and procedures setting out the EDD required for higher risk and PEP customers, particularly in relation to source of wealth. ❌ Poor Practice Lacking evidence of formal sign-off and approval by senior management of high-risk and PEP customers and failure to document appropriately why the customer was within AML risk appetite. 🚧 High-risk customers and PEPs – Enhanced monitoring of high-risk relationships ✅ Good Practice Ensuring transaction monitoring systems are properly calibrated to identify higher-risk transactions and reduce false positives. ❌ Poor Practice Unwarranted delay between identifying suspicious transactions and disclosure to SOCA. What do you see as the number one risk to compliance teams today? #Compliance #RegTech #AML

In this 3rd posting in a series of 4 postings on the National Priorities and the Proposed Rule from June 2024, we’ll address additional elements: Training: To prepare for the policy and procedure updating, though, it’s best for BSA Officers to retrain their FinCrimes staff on what the AML Priorities are, and what the Proposed Rule is calling for. Then, with respect to organizational training, we know that Training usually follows policy and procedure updates, so training content will have to be updated. The Proposed Rule would require AML/CFT training programs to address the risk areas identified in the risk assessment, new regulatory developments and changes, and new information associated with their AML/CFT Program, such as through QA/QC activities or through the risk assessment. AML Monitoring Systems: If policies, procedures, and the risk assessment are being updated, it’s likely that AML Monitoring systems will have to be as well. Be proactive with your vendor if they haven’t reached out yet. New scenarios/agents might need to be designed to address the AML National Priorities and to respond to the results of the risk assessment. Depending on the complexity and materiality of the changes to the system, you may want to consider an independent review. Board Oversight: Although Training was discussed above, this is a good place to reiterate the need for BSA/AML/CFT training for the Board that is based on the institution’s Program. This would also include a presentation of the risk assessment results, and other highlights of the program. Last, Board Oversight is highly dependent on the quality of periodic reporting that is presented to the Board. This would include the number of SAR filings and other metrics, plus KRIs, and KPIs. In part 4 of this series of postings, we’ll discuss the last element of an updated Program, which is Tuning and Model Validation. We’ll also discuss the impact of these AML/CFT changes on risk analysts and internal auditors. Last, we’ll discuss how the prudential regulators responded to FinCEN’s Proposed Rule. #aml #antimoneylaundering #amlcompliance #fincrime

🔍 Unlocking AML Compliance Essentials: A Must-Know for ACAMS Preparation! 🔍 Understanding Anti-Money Laundering (AML) regulations is not just vital for compliance professionals but also for those preparing for the ACAMS certification. Let's delve into a crucial question in this regard: ❓ "In the FATF 40 recommendations, the focus of AML efforts has expanded beyond Financial Institutions. Which three businesses and/or professions are covered?" 🔹 A. Casinos: AML efforts extend to casinos, especially when customers engage in financial transactions meeting or exceeding specified thresholds. Vigilance in this sector is paramount to ensure compliance. 🔹 B. Trust and Company Service Providers: Within the FATF 40 recommendations, trust and company service providers play a pivotal role. Their inclusion underscores the importance of transparency and due diligence in financial transactions. 🔹 D. Real Estate Agents: Transactions involving real estate, where agents facilitate buying and selling, fall under AML scrutiny. Real estate professionals must adhere to AML guidelines to mitigate the risk of money laundering activities. 💼 As the scope of AML regulations expands, it becomes increasingly relevant for those preparing for the ACAMS certification to grasp these fundamental concepts. Understanding which entities fall under regulatory scrutiny is crucial for upholding financial integrity. Let's continue to uphold the highest standards of compliance and integrity in our industries! 💡💼 #AMLCompliance #FinancialIntegrity #FATFRecommendations #RegulatoryStandards #ACAMS #CertificationPrep Have you found this information helpful in your ACAMS preparation? Share your thoughts and experiences in the comments below! 👇📝

Attention, Finance Gurus! The AML Compliance Checklist for 2024 is Here! 🚀 Hey everyone! The Financial Conduct Authority dropped a bombshell, warning over a thousand financial institutions about AML compliance. With fines soaring over $7 billion last year, it's crystal clear that this is serious business. As someone always on the pulse of the financial scene, I'm here to tell you that keeping your AML game tight is more crucial than ever. The 2024 AML Compliance Checklist is your golden ticket to staying ahead of the game and avoiding those nasty fines. Here's what you need to know: ~ Start strong with a solid risk assessment. ~ Whip your internal AML policies into shape. ~ Keep a sharp eye on watchlists and sanction lists. ~ Ace your customer due diligence (CDD). ~ Monitor transactions like a pro and report anything suspicious. ~ Keep your team in the know with regular AML training. ~ Be quick to report any suspicious activities. ~ Keep your records neat and handy. And, of course, arm yourself with the best AML tools out there. By following these guidelines, you're not just avoiding penalties but also boosting your security and building trust with your customers. It's time to level up your AML compliance and stay ahead of the curve! Do you have questions or wanna chat? Hit me up at umair.m@amlwatcher.com. Let's tackle AML compliance together! 💪 #AMLCompliance #FinancialRegulation #RiskManagement #FinancialServices #ComplianceChecklist #AntiMoneyLaundering

🤯 I was away for one week... and everything has gone #AML crazy! Some updates: 1️⃣ The Financial Conduct Authority published a Dear CEO Letter aimed at Annex 1 firms, identifying weaknesses in four key AML controls: - Business model discrepancies - Risk assessments (both business-wide and customer) - Due diligence and ongoing monitoring policies and procedures - Governance, resourcing and training ⚠ The FCA has requested firms conduct a gap analysis against these areas within 6 months. ➡ Thistle Initiatives summary - https://lnkd.in/e_ERvH3b ➡ Link to the FCA letter - https://lnkd.in/eq6wTt6t ⬇ Links to other helpful resources in the comments below! 2️⃣ Today HM Treasury announced a new consultation on improving the effectiveness of the Money Laundering Regulations. This consultation highlights the focus on AML, but also the need for proportionality and ensuring the regulations are fit for purpose. The consultation will look at: - Making customer due diligence more proportionate and effective - Strengthening system coordination - Providing clarity on scope of the MLRs - Reforming registration requirements for the Trust Registration Service. 👀 One to watch and input into... ➡ Link to the consultation - https://lnkd.in/ejTCe6UV 3️⃣ The The Wolfsberg Group has been on fire 🔥 with new publications. A couple of recent ones: - Out today, an updated statement on the suppression of terrorist financing. The statement covers core control areas such as the risk-based approach, CDD, ongoing monitoring and screening. 🖱 Link here - https://lnkd.in/eBZwmmqc - The Group published an updated FAQs guide on managing country risk. This is a really helpful document when building or uplifting risk assessments. 🖱 Link here - https://lnkd.in/e7hM9n3y

𝐁𝐮𝐢𝐥𝐝𝐢𝐧𝐠 𝐚𝐧 𝐞𝐟𝐟𝐞𝐜𝐭𝐢𝐯𝐞 𝐀𝐧𝐭𝐢-𝐌𝐨𝐧𝐞𝐲 𝐋𝐚𝐮𝐧𝐝𝐞𝐫𝐢𝐧𝐠 𝐏𝐫𝐨𝐠𝐫𝐚𝐦   Developing a robust Anti-Money Laundering (#AML) initiative across financial institutions and regulated sectors is essential to mitigate the risks of financial crime and maintain regulatory compliance due to the strict AML rules and regulations we now see around the globe. 𝐁𝐞𝐥𝐨𝐰, 𝐰𝐞 𝐞𝐱𝐩𝐥𝐨𝐫𝐞 𝐤𝐞𝐲 𝐟𝐚𝐜𝐭𝐨𝐫𝐬 𝐭𝐡𝐚𝐭 𝐜𝐨𝐧𝐭𝐫𝐢𝐛𝐮𝐭𝐞 𝐭𝐨 𝐚 𝐬𝐭𝐫𝐨𝐧𝐠 𝐀𝐌𝐋 𝐩𝐫𝐨𝐠𝐫𝐚𝐦: 𝐏𝐨𝐥𝐢𝐜𝐲 𝐚𝐧𝐝 𝐏𝐫𝐨𝐜𝐞𝐝𝐮𝐫𝐞𝐬: 📍Clearly defined policies and procedures tailored to the organisation's risk profile and regulatory requirements. 📍Comprehensive guidelines for customer due diligence (CDD), enhanced due diligence (EDD) and transaction monitoring. 𝐑𝐞𝐩𝐨𝐫𝐭𝐢𝐧𝐠 𝐎𝐛𝐥𝐢𝐠𝐚𝐭𝐢𝐨𝐧𝐬: 📍Robust mechanisms for identifying and reporting suspicious activities to the relevant authorities promptly. 📍Adherence to regulatory reporting requirements, including filing Suspicious Activity Reports (SARs) and Suspicious Transaction Reports (STRs) as mandated by applicable laws. 𝐌𝐨𝐧𝐞𝐲 𝐋𝐚𝐮𝐧𝐝𝐞𝐫𝐢𝐧𝐠 𝐑𝐞𝐩𝐨𝐫𝐭𝐢𝐧𝐠 𝐎𝐟𝐟𝐢𝐜𝐞𝐫 (𝐌𝐋𝐑𝐎): 📍Appointment of a qualified and experienced MLRO responsible for overseeing the AML program's effectiveness. 📍MLRO serves as the central point of contact for AML/CFT matters, ensuring compliance with regulations and liaising with regulatory bodies as necessary. 𝐀𝐌𝐋/𝐂𝐅𝐓 𝐓𝐫𝐚𝐢𝐧𝐢𝐧𝐠: 📍Ongoing training programs for employees at all levels to raise awareness of AML/CFT risks, regulations and the organisation's policies and procedures. 📍Tailored training sessions for frontline staff, compliance personnel and senior management to ensure a comprehensive understanding of their respective roles and responsibilities in AML/CFT compliance. 📍Regular updates and refresher courses to keep staff informed about evolving AML/CFT trends, typologies and regulatory developments. The above are just some of the main factors required to achieve an effective AML Program, what other factors would you consider? Let us know in the comment section. #AML #AntiMoneyLaundering #FinancialCrime #Compliance #RegulatoryCompliance #RiskManagement #KYC #CDD #EDD #TransactionMonitoring #MLRO #AMLTraining #AMLProgram #AMLCompliance #TrainingAndDevelopment #FinancialRisk #MoneyLaundering #TerroristFinancing #SuspiciousActivityReporting #ComplianceTraining #KYCLookup

𝐋𝐞𝐭’𝐬 𝐥𝐨𝐨𝐤 𝐚𝐭 𝐭𝐡𝐞 𝐦𝐞𝐚𝐧𝐢𝐧𝐠 𝐨𝐟 𝐏𝐑 - 𝐏𝐞𝐫𝐢𝐨𝐝𝐢𝐜 𝐑𝐞𝐯𝐢𝐞𝐰𝐬 Periodic Review (PR) in Anti-Money Laundering (#AML) refers to the systematic process of reassessing the risk profile of existing clients or customers at regular intervals. Periodic Reviews involves reviewing the transactions, activities and overall relationship with the customer to ensure ongoing compliance with regulatory requirements and internal policies. By conducting periodic reviews, financial institutions can identify any changes in a client's risk profile, such as significant increases in transaction volumes or changes in business activities, which may indicate potential money laundering or terrorist financing risks. Implementing robust periodic review procedures enables institutions to effectively monitor and manage risks associated with their client base, enhancing the overall effectiveness of their AML program. Additionally, periodic reviews facilitate the timely identification of any gaps or weaknesses in customer due diligence (#CDD) processes, allowing for prompt remediation actions to be taken to strengthen the institution's AML framework. ⭐ If you find this valuable, please like and share it with your network. ⭐ What acronym is the most confusing one within the AML space? Let us know in the comments down below. 💬⬇️ 𝐁𝐞 𝐬𝐮𝐫𝐞 𝐭𝐨 𝐡𝐢𝐭 𝐭𝐡𝐞 𝐟𝐨𝐥𝐥𝐨𝐰 𝐛𝐮𝐭𝐭𝐨𝐧 𝐟𝐨𝐫 𝐜𝐨𝐧𝐭𝐢𝐧𝐮𝐨𝐮𝐬 𝐨𝐧𝐥𝐢𝐧𝐞 𝐀𝐌𝐋 𝐞𝐝𝐮𝐜𝐚𝐭𝐢𝐨𝐧! #PeriodicReview #AML #AntiMoneyLaundering #Compliance #RiskManagement #CustomerDueDiligence #RegulatoryCompliance #KYC #CDD #FinancialCrime #RiskAssessment #AMLFramework #MoneyLaundering #TerroristFinancing #Regulations #FinancialServices #FraudPrevention

𝐖𝐡𝐚𝐭 𝐄𝐱𝐚𝐜𝐭𝐥𝐲 𝐚𝐫𝐞 𝐏𝐞𝐫𝐢𝐨𝐝𝐢𝐜 𝐑𝐞𝐯𝐢𝐞𝐰𝐬 𝐰𝐡𝐲 𝐢𝐬 𝐢𝐭 𝐈𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐭 𝐭𝐨 𝐏𝐞𝐫𝐟𝐨𝐫𝐦 𝐢𝐭❓ By conducting periodic reviews, financial institutions can identify any changes in a client's risk profile, such as significant increases in transaction volumes or changes in business activities, which may indicate potential money laundering or terrorist financing risks. KYC In Africa is your go-to destination for all things AML-related tailored specifically for our audience on the African continent. Follow our page for bespoke content designed to enrich your understanding of AML/KYC practices.